Infineon to invest $1.9 billion in Austrian chip plant

BERLIN -- Infineon Technologies will spend 1.6 billion euros ($1.9 billion) over six years to build a new factory in Austria, in a bet on rising demand for semiconductors that go in everything from electric cars to wind turbines.

Infineon will create 400 new jobs at the new site in Villach, southern Austria, where the production of 300-millimeter thin wafers is due to start in 2021. The factory is close to an existing company facility and has the potential to generate 1.8 billion euros in yearly sales, Infineon said.

"Global demand for power semiconductors is soaring," Infineon CEO Reinhard Ploss said. "Growth is underpinned by global megatrends such as climate change, demographic change and increasing digitization."

Infineon, which competes with NXP Semiconductors and STMicroelectronics, is pushing into the growing market for electric cars and renewable energy that provides fresh revenue streams as demand for semiconductors used in smartphones and tablets slows. It's part of Ploss' bet on trends such as energy efficiency, connectivity and mobility.

In March, Infineon and SAIC Motor, China's largest automaker by sales volume, revealed a new joint company to produce power modules for Chinese manufacturers of electric cars and plug-in hybrids, jointly investing at least 100 million euros and hiring 250 people to expand Infineon's chip factory in Wuxi.